Italian Prime Minister Silvio Berlusconi’s ministers on Tuesday approved 24 billion euros (US$30 billion) in budget cuts for the 2011-2012 period aimed at protecting the country from the sort of market speculation that pushed Greece to the brink of bankruptcy.
The measures seek to reduce the budget deficit to below 3 percent of GDP by 2012, down from 5.3 percent last year. The government said in a statement that the measures focused on reducing public spending for both Italy’s highly paid politicians and public administration as well as on fighting tax evasion, a major revenue drain.
Berlusconi and Minister of Finance Giulio Tremonti were scheduled to hold a news conference yesterday to detail the measures.
They call for a three-year wage freeze for public workers and pay cuts for highly paid public servants, the statement said. There also are measures to reduce bureaucracy, help the underdeveloped south and crack down on those falsely receiving disability benefits.
All the measures must be passed by parliament, where there could be political fights waged.
Italy’s measures are among cuts under way across Europe as the continent tries to convince markets that it can manage its debt load and avoid another near-default like Greece’s.
In Spain, billions in cuts to civil servants’ salaries go into effect next month and the Socialist government has frozen some retirement pensions starting next year, eliminating cost of living increases. France is raising the retirement age and Portugal is hiking taxes from June 1, among other measures.
Germany will decide next month just how to cut at least 3 billion euros from the budget, including possible fresh cuts to once-sacred unemployment benefits.
On Monday, Britain, which is not part of the eurozone, unveiled £6 billion (US$8.6 billion) in cuts — mostly to government payrolls and expenses.
The impending cuts are catching many Italians off-guard, after having been assured just last month by both Berlusconi and Tremonti that Italy would be able to exit the crisis without drastic measures.
“I am worried because since the euro has come into being my pension has been cut in half and now I am afraid to be penalized also by this crisis,” said Giannina Di Matteo, a 68-year-old retiree in Rome’s historic center.
Italy’s largest union joined smaller labor groups and the opposition in attacking the measures yesterday.
“If I’m a citizen who earns a million euros a year thanks to capital gains, I don’t shell out a single euro in the set of sacrifices,” Guglielmo Epifani, head of the CGIL union, told La Stampa daily.
“There’s no need for big words — I expected more equitable austerity measures. It doesn’t seem to me that’s the case,” he said.
He said the union will decide on a national strike after evaluating the package.
Berlusconi has kept an unusually low profile in recent days, saying almost nothing about the budget cuts and leaving the talking to his top aides. Media reports say he is unhappy with the package, fearing it will hurt his approval ratings.
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